Statement by H.S.H. Prince Albert II at the United Nations High-Level Event on Climate Change
24 September 2007
Video in English
Thank you Mr. Co-Chairmen,
Ladies and Gentlemen,
One of the main objectives of this high level event is certainly to recognize that public and private funding have a key role to play in promoting sustainable development.
It seems to me there are three main ways of taking up the challenge of financing the response to climate change the cost of which has been estimated at over 200 billion dollars per year to bring CO2 emissions back to the current level by 2030. A significant part of future investment and power generation must go to renewable power, nuclear water and sealed sequestration. Additional investment will be needed in research and development of new technologies. Public funding must increase and private investment must also be stepped up.
This leads me to the second point, namely opportunities for profitability, for individuals and enterprise combating climate change. In other words, for entrepreneurs and investors. A third part of this puzzle, which is directly linked to the second, relates to the expected profitability for investors who choose to invest in an environmentally and socially responsible way. Recent studies have shown clearly that the expected returns on ethical funds may be higher than those of traditional funds and so sustainable investment practices are not a handicap to growth for the entrepreneur or for the investor. In other words, socially responsible investment is no longer just a commendable idea, it is now something that is viable.
There are many opportunities and the long term fundamental economic factors look good. This is another reason for trying to insure that initiatives like the United Nations principles for responsible investment be more widely known and encouraged. Long term investment must take account of the broader interests of those who invest. Warming in the climate will certainly require slow and gradual change for enterprises and investment. The causes and consequences of climate change are global and they raise the issue of how to take account in the best possible way of the interest of future generations. Some experts are fairly convincing when they say that global warming is a factor in changing public and private policies just in the same way and as importantly as global markets and population changes affect those policies. This means that the response must be bring together implementation of international regulations and standards and also innovation which comes above all from the business sector responding to economic incentives.
At this point, I find myself feeling obliged to refer to one rather self evident economic dilemma. Most alternative technologies are today more costly than existing technologies, as years if not decades will be needed before such technologies become at least competitive or at best profitable than private entrepreneurs might be a little reluctant to invest massively in these areas even though they are promising. And this is one of the reasons why mechanisms such as a carbon tax or a quota system and emissions trading should both be considered since each of them offer something the other does not.
Two weeks ago for the fifty first year running, our Principality hosted the largest annual congress of professionals from the insurance and reinsurance industries. This is certainly one of the economic sectors that is most sensitive to climate change and its implications. So I was not surprised that one of the main recommendations of the insurance industry was that insurers and reinsurers should themselves show a carbon-neutral balance sheet. As for economic circles, they want a clear response from government.
Most entrepreneurs and investors are ready to act but they want clear guidance. Monaco will be hosting a high level conference on finance and sustainable development this year and we will have participating in it Sir Nicholas Stern and Professor Edmund Phelps who won the 2006 Nobel Prize for economics.
I am also proud to say that in February next year the Principality will be hosting the 10th special session of the UNEP Governing Council and the Global Ministerial Forum on the Environment.
One of the ambitions that I hold dear for my country is that it be able to, over the best possible conditions for entrepreneurs and investors who are involved in research development, and marketing of new environmentally friendly technologies. Moreover, bills have recently approved making Monaco even more attractive to assets managers who want to create and manage investment funds in an environmentally and socially responsible way.
One last but very important source of additional financing is philanthropy. Here I would pay tribute to those whose generosity and strength has pointed the way forward and improved what is being done by governments at the world level. I myself decided in June last year to set up my own Foundation to make a contribution. Its mission is to identify pilot projects and to speed up implementation so that there can be tangible results to support a balanced and sustainable management of natural resources.
May I conclude by saying that, more than ever before, it is the will power and the involvement of all political and economic actors, investors, enterprises and governments that will enable us to take up the challenge of climate change.
Thank you very much.